It was an historic gamble. Emmanuel Macron calling a snap election following his party's crushing following his party's crushing defeat in Sunday's European Parliament elections. And it surprised everyone. And just a month later, we have a hung parliament scenario. This is a first time no one is gaining an absolute majority in the National Assembly. So why'd Macron risk it in the first place? If you talk to or listen to his ministers, they will say this is the decision of one man and one made in full view of galvanized opposition parties on the left and, crucially, the right. It was a dangerous election a president didn't have to call and would trigger panic in the country's vital bond market. So what sparked Macron's great gamble? And what does the outcome mean for Europe's second biggest economy? Before we get to all the candidates and the uncertainty, let's start with the economy. What is it about calling a snap election in France that's leading to a reaction like this over the last 24 hours? That was a good question, because investors had spent that time offloading French debt as quickly as they could. Look what happened. That's the biggest jump in the France bond risk gauge in more than a decade. It's also called a spread. And in this case, the lower the line, the closer to nice, safe. Germany investors thought the risk of holding French debt was. And this very literal measurement of risk is essential in understanding the uncertainty of what's to come. Because investors who buy and sell bonds are really power players in European politics. They're the ones who lend countries money when they need it most. Remember British Prime Minister Liz Truss? The reason she spent less time in office than some people keep eggs in a kitchen kitchen was because her unworkable economic policies spooked the bond markets so much market so much it sent the UK's borrowing costs to a 25 year high. The last thing France wanted was uncertainty and to be seen as financially risky. After all, the country been trying to cement Paris as the continent's leading financial hub in the wake of Brexit. But suddenly people started to question whether that was But suddenly people started to question whether that was going to remain the case. If either the far right or the far left come into power their concern will not be increasing France's attractiveness as a financial center, and that many of the policies put in place by Macron could be rolled back. by Macron could be rolled back. And now investors have put France in the firing line. They view Germany as the most responsible pair of hands that they can possibly get. pair of hands that they can possibly get. The difference in the yield, in other words, the difference in the interest rate that people insist on getting in order to buy your bonds between France and Germany has been very narrow. Macron had intended the election to provide his government some clarification. So why did it cause so much uncertainty? Let's go back to the exciting Parisian Spring of 2017. Disneyland Paris had just debuted a new Star Wars ride, and the French public had elected its youngest ever president. 39 year old Emmanuel Macron. He really was a fresh face for politics here. Macron came to power, destroying the traditional establishment party, the Republican conservative Party, on the right and the Socialist Party on the left, which had basically been ruling France for years. At the time, there was a socialist prime minister, who was perceived as quite right right wing and quite conservative, and he was perceived as the more left wing option. So in a way, he was elected in 2017 by the left. And two years ago he was elected again thanks to the left. Essentially, he drawn considerable support from voters who simply disliked the opposition more than him. And seven years later, that is support he'd see significantly weaken. Marine Le Pen had tried to rebrand her National Rally, formerly the National Front, as a less toxic, more electable party since taking over in 2011 from her father Jean-Marie, who was notorious for saying stuff like this Marine Le Pen would soften her stance on immigration in future. But none of this was enough for now, and Macron took office. But the former Rothschild banker and graduate at the prestigious policy school. school ENA earned public confidence on the world stage. His elite background didn't always help, however. He was visiting crowds. A woman talked about how her son was having difficulty finding a job after It was seen as very, very condescending and really seen as out of touch with the concerns of normal French people. There's often been this split between the elite and sort of the regular people in France, and Macron really is the epitome of the French elite in the way that he speaks, in the way that he uses obscure metaphors and references. I think even some people who would agree with Macron's policies do not like Macron because of his personality. They also didn't like his plan to raise taxes on fuel. The fuel tax would have hit low income people hardest and further watered down his popularity. Despite all the chaos, the economy remained relatively stable, essential for what came next. Covid shut down the country just like it shut down many other countries. But the French state did a very good job actually, during Covid, although the government had to borrow a lot by issuing bonds to achieve that, pushing up national debt to the second highest level among the major advanced economies as a percentage of GDP. But then the big misfire. Today is the first day of a general strike in France against the French president Emmanuel Macron's pension reform, which plans to raise the retirement age from 62 to 64 years old. Every time he opened his mouth about it, his popularity went down. his popularity went down. At some point, Macron's government was close to being overthrown by a no confidence vote that failed by only nine votes. Watching from the sidelines of power was Marine Le Pen, who realized that defeating Macron would need attractive policies and personalities. When her father made it to the runoff of the election, there were massive demonstrations on the streets. Marine Le Pen saw these protests. She realized that she had to erase the legacy of her father. She ousted him from the party, toned down opinions voiced by her senior MPs, and even insisted they start wearing suits and ties. Anything to tell the country the National Rally was ready to govern. Marine Le Pen has tried to de- demonize her party that people who are law abiding have nothing to worry about from her party. The times when Marine Le Pen has really gained the most in terms of public opinion polls, have been when Emmanuel Macron or his government have made missteps, and now he faced an emboldened yet leaderless alliance of usually disunited left wing parties, ranging from moderates to communists and a cleaned up far right rival selling her party and policies as having left racism and anti-Semitism behind. This is what triggered that bond market panic in the aftermath of Macron's announcement of the snap election. It was a warning shot that investors were prepared to make life a lot harder for any incoming government if it doesn't like what it sees. In the end, French voters delivered another shock. France is heading into political gridlock after a shock defeat for Marine Le Pen's National Rally in Sunday's election. The polls showed Le Pen's party coming out on top, but the left wing coalition came in first, pushing her National Rally into third place behind Macron, meaning none of them could form a government. It looked like the country would essentially be ungovernable. The risk of real change, big change in terms of regulation, taxation, etc. comes from the left and that would be the biggest risk in the French market. Investors may have avoided the worst case scenario of an extremist party running one of the world's most powerful countries, but they remain on edge. That all important French spread with Germany is still historically very high. And with war raging on Europe's eastern frontier and the region struggling to jumpstart economic growth, France looks politically paralyzed, at least for now, at a time when the continent needs leadership.